Saudi Arabia Needs Much Higher Oil Prices

“The improvement in the overall economic conditions with growth recovering this year – it is expected to be at 1.8 percent – will help them to maintain the pace of fiscal adjustment and at the same time will allow the economy to grow again,” Jihad Azour said, as quoted by Reuters. The Kingdom presently plans to have a balanced budget by 2023, but this will only happen if oil prices are high enough, it seems. For this year, Saudi Arabia has stipulated a budget deficit of around US$52 billion, which represents 7.3 percent of GDP. The bad news is that the oil price that the Kingdom needs to make ends meet is rising. Last year, Azour said, it was US$83 a barrel. This year, it will be between US$85 and US$87 a barrel. The silver lining, according to some analysts, is that the discrepancy between breakeven and actual oil […]